Question 4

Fairy Company reported the following flexible budget, as-if budget, and actual results. The company's materials quantity variance is:

A. $3,000 Favorable

B. $3,000 Unfavorable

C. $1,000 Unfavorable

D. $1,000 Favorable

Question 5

The following table presents selected information for Superior Flooring's monthly production budgets for the coming year. Superior's inventory policy is to have ending inventory equal to 10% of the next month's sales.

What is the budgeted production in April?

A. 2,810

B. 2,500

C. 2,790

D. 3,410

Question 6

Which of the following statements about variances is false?

A. If actual sales price is less than budgeted, the result is an unfavorable revenue variance.

B. If actual profit is less than budgeted, the result is an unfavorable total profit variance.

C. If actual direct material price is less than budgeted, the result is an unfavorable materials price variance.

D. If actual sales volume is less than budgeted, the result is an unfavorable activity variance.

E. None of the above is true.